Why Maxwell Technologies Inc. Shares Skyrocketed Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Maxwell Technologies (NASDAQ: MXWL) jumped nearly 23% Wednesday following after the company announced the expansion of its ultracapacitor-based Engine Start Module to medium-duty trucks. Maxwell also enjoyed a positive analyst note from Piper Jaffray.

So what: Previously, Maxwell offered the same technology for heavy-duty diesel trucks, so today's announcement represents a significant expansion.

And though Piper analyst Alexander Potter indicated he couldn't "trace the performance to any one catalyst," he did suggest automotive design wins could be "at least a $1.5 billion annual opportunity" for Maxwell. Potter also reiterated a supply deal with Tesla Motors could be at play given CEO Elon Musk's "affinity for ultracapacitors," so maintained his "Outperform" rating on Maxwell shares and nearly doubled his per share price target from $11 to $21.

Now what: As it stands, shares of Maxwell have risen more than 70% over the past five trading days alone, and on what appears mostly to be speculation given its prospects far down the road. I'm all for long-term thinking, but this run has happened far too quickly for me to be comfortable it won't reverse course just as fast. For now, I think investors would be wise to let the dust settle before diving in further.

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